Restructuring charges and weak top-line growth strained Brown Shoe Co. in the second quarter, as the company reported weaker-than-expected earnings for the period.
The St. Louis-based firm saw a net loss of $4.2 million, or 10 cents a share, for the three months ended Aug. 1, compared with a $2.2 million profit, or 5 cents, in the year-ago period.
Brown’s revenues, which dropped 10 percent to $511.6 million from $569.2 million last year, were impacted by a 6.7 percent slide in same-store sales at Famous Footwear. Sales at Famous Footwear were $314.1 million, down 4 percent from the second quarter last year, while sales in the company’s wholesale division (which includes the Naturalizer and Dr. Scholl’s brands) fell 21 percent to $142 million.
Analysts polled by Yahoo Finance had expected a 7-cent decline for the second quarter, on sales of $539.3 million.
During the second quarter, Brown reported impairment charges of $2 million relating to information technology initiatives. Charges in the first quarter of 2008 totaled $10.1 million, as a result of headquarters consolidation and information technology initiatives.
For the first half of 2009, the company’s net loss totaled $11.8 million, or 28 cents a share, versus a profit of $9.4 million, or 22 cents, in the first half of 2008. Sales dropped 6 percent to $1.05 billion.
As a result of its second-quarter results, the company lowered its full-year sales guidance to $2.18 billion to $2.2 billion, as second-half consolidated sales are expected to be flat or down 2 percent from last year. Famous Footwear stores are forecast to decline in the low- to mid-single digits for the second half, while Brown’s wholesale revenues will be flat to down in the low-single digits for the second half.